If you live in the Hollywood area like this blogger, you’ve no doubt spent time at that Disneyland-esque outdoor mall, the Grove. Hitting the shops, grabbing a bite, seeing a movie, and inevitably, listening to the ubiquitous Frank Sinatra music being blasted through every speaker. (Hearing Sinatra music will now forever be associated in my mind with shopping.)

But the Grove can’t play that Sinatra music (and thereby create that amazing Pavlovian response in its shoppers) without paying up. Indeed, with certain exceptions, the Copyright Act requires any business — be it mall, boutique, restaurant, bar, gym, skating rink, or bowling alley — to pay licensing fees to “publicly perform” copyrighted songs. Although the term “public performance” might conjure up the mental image of Ol’ Blue Eyes’ doppelganger crooning “Come Fly With Me” in front of Banana Republic (if only!), the meaning of the term is much broader and includes not only live performances, but also recordings or broadcasts.

Now if you’ll excuse me, that reminds me, I think there’s a sale at Nordstrom…

Because it would be impractical to expect every business owner to contact each recording artist directly to obtain a license to perform his works, there are three music performing rights organizations, or PROs, in the United States: the American Society of Composers, Authors and Publishers (ASCAP); Broadcast Music, Inc. (BMI); and the Society of European Stage Authors & Composers (SESAC). Most American composers, lyricists and publishers join one of these three organizations, which in turn collect fees from licensees (malls, bars, restaurants, etc) in exchange for a blanket license to publicly perform the works of all of the organization’s members. The majority of the fees collected are then paid back to the composers and publishers as royalties for the performance of their copyrighted works.

If a business owner wishes to negotiate separate licenses with various artists, he is entitled to do so because the organizations’ performance rights are non-exclusive, but as you might imagine, the time, effort and cost involved convinces most businesses to go through ASCAP, BMI or SESAC instead. As ASCAP’s website boasts, its members range “from Duke Ellington to Dave Matthews, from George Gershwin to Stevie Wonder, from Leonard Bernstein to Beyoncé, from Marc Anthony to Alan Jackson, from Henry Mancini to Howard Shore.” Can you imagine a collaborative album by all the living members of that list? Now that would be impressive (I’d especially like to see the live performance, with some Beyoncé-style choreography thrown in the mix).

Not only do ASCAP, BMI and SESAC grant licenses to business establishments, they also monitor any infringement of their artists’ works and are not at all shy about filing lawsuits against infringers. Particularly common in recent years, and particularly infuriating to fans of small live music venues, have been lawsuits brought against bars and restaurants that feature live music performances. In 1996, ASCAP notoriously demanded public performance royalties from the Girl Scouts as payment for campfire singalongs (to which, I suppose, the RIAA’s public relations department can refer when defending its own campaign against individual teen copyright infringers — “Hey, at least we didn’t beat up on the Girl Scouts!”). And as recently as February of this year, ASCAP brought suit against Connolly’s Pub and Restaurant in New York City, alleging that the bar allowed a band to play three Bruce Springsteen songs in the venue in the summer of 2009 but failed to pay ASCAP its annual licensing fee. Springsteen himself was also named as a plaintiff along with songwriter Clinton Ballard, Jr., but later demanded his removal from the lawsuit. Springsteen’s representatives issued a statement that he “had no knowledge of the lawsuit, was not asked if he would participate as a named plaintiff, and would not have agreed to do so if he had been asked.” Connolly’s may ultimately feel the wrath of ASCAP (to the tune of a $30,000 fine) but ASCAP has already felt the wrath of Bruce Springsteen. (Query which is worse? I know my answer, and it is spelled B-O-S-S.)

While many businesses readily pony up the license fees, some small restaurants and bars have decided instead to avoid the fees by cancelling all live music. One recent example is thecoffee shop Mocha Joe in Henderson, Nevada. Owner Mike Hopper opened his shop in August 2009 and decided to invite unsigned bands to perform. But once he started advertising these bands on the Internet, he was promptly contacted by ASCAP, BMI and SESAC. Even though Hopper explained that the bands were playing only original songs and no cover songs, ASCAP informed him that he must pay a low-end license fee, calculated by taking into consideration the capacity of the venue and the number of nights per week that music is performed, because there is a chance that a band might perform a cover song. All in all, the licensing fees to the three agencies would have cost Mocha Joe $1,800 annually, so Hopper shut down live music altogether. In other words, the PROs put Mocha Joe on ice.

This story illustrates the tension between the music performance organizations’ efforts to protect their members’ copyrighted works — arguably, to make absolutely sure that sufficient license fees are being paid, ASCAP, BMI and SESAC may need to err on the side of being overinclusive — and the desire of many small business owners to stage live music performances without breaking the bank. While a proprietor can choose to whom she will pay the license fees (the artist or the PROs), if there is live music being performed, he must pay to play.

Do these strict rules benefit copyright owners? It depends who you are. If you’re an up-and coming (or broke-and-sharing-a-studio-apartment-with-four-people) artist who’ll sell CDs to strangers on a street corner for $1 just to get your music out there, the value of extra exposure probably far outweighs whatever minimal performance royalties you might otherwise be entitled to. On the other hand, if you are already a well-known recording artist or songwriter, protection of your copyright has real monetary value (unless of course, you’re a populist freedom fighter like the Boss, in which case hats off to you). In any event, it is without doubt that ASCAP, BMI and SESAC will continue to aggressively protect their artists’ copyrights. And undoubtedly the “little guy,” ever vocal in this debate, will continue to come up with such zingers as “kiss my ascap” and “you’re such an ascap.”

And as we know, even if Connolly’s, Mocha Joe, and their counterparts across the country replace those live music performances with music recordings or radio broadcasts, they will still have to pony up to the PROs, just like the Grove does for the right to blare “Strangers in the Night.”

2 Responses to “You Gotta Pay to Play: Public Performances of Copyrighted Music”

Ultimately, ASCAP, BMI and SESAC need to rethink some of their policies.

The music industry has changed so much over the last decade, that the remaining companies are simply trying to do a cash grab before the ship really sinks… whether it is companies that deal with performance rights, publishing rights, distribution channels or what have you. These companies have historically relished every chance they had to wring a penny from public houses and establishments.

As Chris Anderson famously said, “Information wants to be free.” This includes content like music. While the PROs are unlikely to be impacted to the extent of the major labels, they need to fix their business model before it becomes untenable.